Head of wealth management at HLB Mann Judd Sydney Michael Hutton said that discussions around superannuation, although not likely to impact a vast majority of Australians, should not deter people from taking advantage of the benefits of SMSFs.
“The discussion around superannuation changes is likely to encourage more people to consider SMSFs because of the flexibility they offer and the ability they give to members and trustees to react to any changes that may be introduced,” he said.
“I think SMSFs are more nimble and better able to adapt to, and make the most of, any changes that may be announced.”
Hutton predicted that Australia would for the most part see small changes, such as removal of the spouse rebate and application of the already-announced surcharge tax on contributions for high-income earners.
He told ifa that SMSFs allow people to avoid the administration systems of a public offer fund, adding that those with SMSFs tend to be more engaged with their super and their retirement plans.
“The key reasons for setting up an SMSF are to gain more flexibility and control, but this also leads to having a higher level of engagement in your wealth planning, and improves the nimbleness with which you can act,” he said.
Hutton encouraged people to set up an SMSF sooner rather than later, if appropriate. He added that while many of the possible changes to superannuation had since been rejected, this was not to say they won’t rise again in the future.
“Both the major parties appear to recognise the growing electoral clout of retirees and would be concerned about bringing in changes across the board that affect retirees too much,” he said.
“The recent debate has also made it clear that to change the current superannuation system radically would dent confidence in the system and impact retirement plans of both aspirational and current self-funded retirees.”
I have a SMSF and I also am SPAA accredited. But with the innovation of many retail super funds in recent years (i.e. wrap super accounts) is there really any compelling reason for most clients to take on all the extra admnin and responsibility of a SMSF if they don’t intend to buy property of gear their super? Nearly everything else can be done via a quality retail fund (i.e. direct shares, term deposits, etc). I love SMSF’s, but 8 out of 10 people I see who have one don’t need one and are not aware of the full responsibilities they have as a result and would be far better placed in quality wrap super account. Most of the ‘control’ people seek from a SMSF is an illusion, as they have just as much through good retail funds, they just never bothered understanding or exercising it. And accountants certainly dont mind suggesting them either, given the tax and audit revenue they generate. I see far too many SMSF’s with just cash and term deposits and nothing else!